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IRVINE, Calif. - ReShape Lifesciences® (NASDAQ:RSLS), a leader in weight loss and metabolic health solutions trading at a market capitalization of just $3.8 million, presented pre-clinical data on its Diabetes Neuromodulation device at the 12th Annual Minnesota Neuromodulation Symposium today. According to InvestingPro data, the company maintains a healthy gross profit margin of 63%, despite recent market challenges. The device, aimed at managing glucose levels in diabetes patients, has demonstrated the ability to modulate blood glucose without causing cardiac side effects, a significant advancement over existing vagal stimulation methods.
The study, conducted on a swine model of Type 1 Diabetes Mellitus, showed that the device could reverse insulin-induced severe hypoglycemia by stimulating the posterior sub-diaphragmatic vagus nerve (PVN). This targeted approach, known as Hypoglycemia Vagus Nerve Stimulation (HVNS), increased blood glucose levels and glucagon secretion without affecting heart rate, blood pressure, or respiration.
During the tests, HVNS raised blood glucose from 45 to 58 mg/dL in one subject and from 51 to 68 mg/dL in another within 30 minutes of stimulation. Blood glucagon levels also increased significantly during the procedure. Importantly, the mean heart rate remained stable, and no significant cardiac changes were observed during stimulation. Vomiting, a side effect of concern, only occurred at current amplitudes higher than those needed for therapeutic glucose changes, suggesting a clear therapeutic window for the device’s use.
The ReShape Diabetes Neuromodulation system is a minimally invasive implant concept that modulates specific vagus nerve branches involved in regulating plasma glucose. The technology is designed to stimulate the pancreas to release insulin during hypoglycemic episodes while blocking the liver’s response to decrease glucose release and insulin resistance. With annual revenue of $8 million and significant R&D investments, InvestingPro analysis indicates the stock is currently undervalued, though investors should note the company’s weak financial health score of 1.43 out of 10.
According to Paul F. Hickey, President, and CEO of ReShape Lifesciences, the company will continue to seek non-dilutive funding and partnerships to advance the development of this device, which has the potential to improve the quality of life for individuals with Type 1 or Type 2 diabetes.
The technology’s pre-clinical success positions ReShape Lifesciences at the forefront of diabetes management innovation. The company is also known for its FDA-approved Lap-Band® systems and the Obalon® balloon technology for weight loss.
ReShape Lifesciences has entered into an asset purchase agreement with Biorad Medisys, Pvt. Ltd., where it has agreed to sell substantially all of its assets, including the Lap-Band® System, Obalon® Gastric Balloon System, and the DBSN™ system, excluding cash. Following the closing of the transactions, the DBSN™ system will be owned by Biorad. The company’s stock has experienced significant volatility, with a beta of 1.92 and a 96% decline over the past year. Discover more detailed analysis and 12 additional ProTips about RSLS with an InvestingPro subscription, including comprehensive financial health metrics and expert insights.
The information provided is based on a press release statement by ReShape Lifesciences.
In other recent news, ReShape Lifesciences reported a notable decrease in revenue and gross profit for fiscal year 2024, with revenue dropping by 8% to $8 million. The company implemented significant cost reductions, cutting operating costs by 42%, which included reductions in sales, marketing, and R&D expenses. In a strategic move, ReShape Lifesciences amended its asset purchase agreement with Ninjour Health International, reducing the exercise price from $5.16 million to $2.25 million and extending the termination date to June 30, 2025. Additionally, ReShape Lifesciences was granted a Notice of Allowance for a new patent related to an intragastric balloon system, enhancing its intellectual property portfolio. The company also secured a patent for its Diabetes Neuromodulation technology, which promises a novel approach to treating Type 2 diabetes. ReShape Lifesciences continues to focus on expanding its product portfolio through partnerships, including an exclusive agreement with Motion Informatics for neuromuscular rehabilitation devices. The company is also in the process of merging with Viome Therapeutics and selling assets to Biorad Medisys, Pvt. Ltd., aiming to maximize shareholder value.
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